As we usher in the new financial year, it’s essential for businesses and job seekers to be aware of the significant changes commencing from July 1, 2024. These changes, encompassing tax cuts to minimum wage increases, are set to have a profound impact on the Australian workforce. This article delves into these changes and their potential influence on workplaces and job seekers.
Key Changes
The dawn of the new financial year brings with it several pivotal changes. Firstly, the tax cuts announced earlier this year will be implemented, introducing new tax brackets that will affect a substantial portion of the workforce. Secondly, the national minimum wage will see a rise of 3.75%, escalating to $24.10 per hour. Lastly, compulsory superannuation payments will increase by 50 basis points to 11.5% of earnings. These changes are anticipated to have a considerable impact on both businesses and employees.
Effects on Workplaces
For businesses, these changes signify adapting to new financial realities. The increase in the minimum wage could lead to elevated operational costs, particularly for small and medium-sized enterprises. Conversely, the tax cuts could potentially augment disposable income, fuelling consumer spending and potentially leading to increased business revenues. Moreover, the rise in superannuation payments could impact payroll processes and employer contributions.
With over 20% of Australian workers stand to benefit from the increase in minimum and award wages. If you’re on the national minimum wage and work a 38-hour week, you’ll earn $913.91. That’s an increase of about $33.
Effects for Job Seekers
For job seekers, these changes could translate into higher take-home pay due to the increase in the minimum wage and lower income tax. The increase in superannuation payments also signifies a greater investment in their future retirement. However, these changes could also lead to increased competition in the job market, as businesses adjust to higher operational costs.
The labour market is forecast to weaken slightly over the forecast period with the unemployment rate pushing up to 4 percent by June 2024 and then stabilising at 4.5 percent for the following 2 years. This stabilisation in the labour market pushes down expected wages growth to low-to-mid 3 percent range over the forecast period.
Navigating the new financial year will necessitate adaptability and strategic planning for both businesses and job seekers. As we progress, it will be intriguing to observe how these changes will mould the Australian workforce in the 2024/2025 financial year.
